KPI Green Energy: India has become the fourth largest player globally in wind and solar power, with a renewable energy capacity of 179.5 GW. India’s renewable energy sector is seeing an uptrend with green stocks soaring, fueled by ambitious government targets, falling costs, and positive investor sentiment.

As the demand for green energy continues to surge, KPI’s noteworthy performance in the stock market has caught the eye of many. With a year return of 238% in a year and a 5-year return of 476%, the stock has performed exceptionally well.  

telegram channel

This article delves into the various facets of KPI Green Energy Limited, exploring its business overview, segment analysis, strategies of growth, and future outlook. By understanding the company’s trajectory and broader trends shaping the green energy sector, investors and enthusiasts alike can gain insights into the promising future of KPI and India’s overall renewable energy landscape.

KPI Green Energy Limited

Company Overview

KPI Green Energy Limited is a leading player in the renewable energy sector, known for its commitment to generating sustainable power. Based in Gujarat, India, the company has extensive experience and operates as both an Independent Power Producer (IPP) and a Captive Power Producer (CPP).

One of KPI’s distinguishing traits is its dual function. As an IPP, the corporation contributes to the overall energy system by selling power on the open market. Simultaneously, as a CPP, KPI generates electricity for its use, boosting self-sufficiency in energy.

Let’s learn more about the segments and their contribution to the company’s revenue

Segment Analysis

The company has major two business segments – IPP and CPP

Independent Power Producer (IPP) Segment

KPI Green Energy Limited serves as an Independent Power Producer (IPP), specializing in developing, owning, and operating grid-connected renewable power projects. By entering into Power Purchase Agreements (PPAs) with third parties, the company generates revenue by selling power units from its various projects, including installations for solar and wind-solar hybrids. This segment contributes 18% of revenue to the company. 

Captive Power Producer (CPP) Segment

With a revenue contribution of 82%, the Captive Power Producer (CPP) segment focuses on developing and maintaining grid-connected Solar and Wind-Solar Hybrid Power projects. Revenue is generated by selling these projects to CPP customers for their captive use requirements. This dual-segment approach ensures a diverse revenue stream for KPI, contributing to its robust position in the renewable energy sector. 

Segment (H1 FY24)IPPCPP
Revenue (in crore)₹72.38₹330.87
Growth (YoY)99%35%

Comparing H1 of FY22-23 with H1 of FY23-24, KPI Green Energy Limited witnessed substantial growth in its consolidated Captive Power Producer (CPP) sales, marking a remarkable 35% increase from  ₹ 245.54 Crores to  ₹ 330.87 Crores. Simultaneously, the Independent Power Producer (IPP) segment experienced exceptional growth, soaring by 99% from  ₹36.47 Crs to  ₹ 72.38 Crs. 

Let’s dive into the factors driving the growth of the company

Key Growth Drivers of the Company

Rise in India’s Renewable Energy Sector Growth

The growth of India’s renewable energy sector is fueled by affordable financing and anticipated declines in solar wind module costs which are leading to the decline

in solar prices in the country. Additionally,  ₹35,000 crore has been allocated to the green Energy transition in the Union Budget to boost the renewable energy sector of the country.

KPI’s growing order book

KPI Green Energy Limited achieved significant milestones with the single largest order for a Hybrid Captive Power Producer (CPP) of 145.20 MW and a triumphant bid of 240 MW DC from GUVNL in the Independent Power Producer (IPP) segment. These accomplishments propel the company’s total order book to an impressive more than 541 MW, aligning with its ambitious target of reaching 1000 MW by 2025.

Launch of Hybrid Model for Cost Effectiveness

Embracing a hybrid model of solar and wind energy, KPI enhances grid stability and offers a reliable, efficient, and sustainable approach to renewable energy generation. With an expanded capacity to 346 MW across new locations, KPI is committed to further enhancing the efficiency and cost-effectiveness of its hybrid model.

Financial Recognition: ICRA Credit Rating Upgrade

Credit rating agency ICRA upgrades KPI’s credit rating from BBB+ to A- (Stable) affirming the company’s financial strength and credibility in the renewable energy sector.

Efficient cost management

KPI streamlines engineering procurement and construction (EPC) tasks by leveraging KP Buildcon Private Limited. Utilizing offerings like the Module Mounting Structure (MMS) and steel structures for the 66KV switchyard, KPI reduces costs, maintains high quality, and accelerates the construction of new solar parks.

With this, let’s go quickly through the financials of the company

Financial Walkthrough

The company reported a net revenue of ₹643.79 crores in FY23, an increase of 79.98% as compared to the revenue being ₹229.94 crores in the previous year. 

The net profit after tax amounted to ₹ 109.63 Crore in FY23 from ₹43.25 in FY22, an increase of 53.48%. 

The ROE of the company increased by 51.10% from 28.13% in FY22 to 42.51% in FY23. This was mainly due to Revenue growth in the CPP Business and the consequent increase in profit during FY23.

The ROCE of the company also saw a significant increase by 29.69%, from 22.91% in FY22 to 29.71% in FY23 

The company’s debt-to-equity ratio is 1.96, an increase of 24.63% as compared to 1.57 in FY22.

KPI Green Energy – Future Plans

The company aims to reach a capacity of 1 GW by 2025, reflecting its commitment to substantial growth in the renewable energy sector.

Segmented Growth Targets

The company has set specific targets for its Captive Power Producers (CPP) and Independent Power Producer (IPP) verticals. It aims to achieve a cumulative portfolio of 750 MW under CPP and 250 MW under IPP by 2025. 

Aggressive Expansion into Wind-Solar Hybrid Systems

In line with its commitment to sustainability, KPI plans to aggressively enhance its footprint in Wind-Solar Hybrid systems. This move signifies the company’s dedication to exploring innovative and efficient ways of harnessing renewable energy.

Adopting Robotic Waterless Cleaning and Advanced Solar Technology

KPI emphasizes environmental responsibility by transitioning from manual water-based panel cleaning to robotic waterless cleaning. This shift not only contributes to water conservation but also enhances the efficiency of solar panel maintenance.

Digital Transformation and Central Monitoring System (CMS)

To streamline operations, KPI aims to enhance its use of digital technology. The establishment of a Central Monitoring System (CMS) at its Head Office is on the horizon. This system will allow the company to monitor, optimize, and control all its projects and assets, irrespective of their geography and location.

Government Tender Participation

As part of its growth strategy, KPI is gearing up to enter government bidding for renewable tenders. This expansion into government projects aligns with the company’s goal of contributing to the larger national agenda for sustainable energy development.

Conclusion

In India’s dynamic renewable energy sector, KPI Green Energy Limited shines as a standout player with impressive growth and strategic foresight. Operating both as an Independent Power Producer (IPP) and Captive Power Producer (CPP), KPI ensures a diverse revenue stream, emphasizing innovation, sustainability, and robust financial performance.

The company’s order book, coupled with credit rating recognition and ambitious expansion plans, reinforces KPI’s dedication to leading the charge in renewable energy. Key accomplishments, including securing the largest order for a Hybrid Captive Power Producer and successful bids in the Independent Power Producer segment, firmly established KPI as an industry trailblazer.

We hope you found this exploration of KPI Green Energy Limited insightful. If you enjoyed this article and would like to see more content on India’s renewable energy landscape, please share your thoughts below in the comments section!

Written by Akshita Maloo

By utilizing the stock screenerstock heatmapportfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.


Start Your Stock Market Journey Today!

Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!